A Decrease in the Price Level Leads to Which of the Following

question 108

Multiple Choice

A decrease in the price level leads to which of the following sequences?

• A) The money demand curve shifts leftward,the interest rate drops,the aggregate expenditure line shifts upward,and there is movement downward along the aggregate demand curve.
• B) The money demand curve shifts rightward,the interest rate increases,the aggregate expenditure line shifts downward,and there is movement upward along the aggregate demand curve.
• C) The money demand curve shifts leftward,the interest rate drops,the aggregate expenditure line shifts downward,and there is movement upward along the aggregate demand curve.
• D) The money demand curve shifts rightward,the interest rate increases,the aggregate expenditure line shifts upward,and there is movement downward along the aggregate demand curve.
• E) The money demand curve shifts leftward,the interest rate drops,the aggregate expenditure line shifts upward,and there is movement upward along the aggregate demand curve.

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Definitions:

Tax

A mandatory financial charge or some other type of levy imposed on a taxpayer by a governmental organization in order to fund government spending and various public expenditures.

Reduction

The act of making something smaller or less in amount, degree, or size.

Sellers

Individuals or entities that offer goods or services for sale to consumers or other businesses, participating in economic transactions.

Tax

A compulsory financial charge or some other type of levy imposed by a governmental organization on individuals or entities to fund public expenditures.